Will The Small Business Financing Loan Still Work ? The Status Of SBL Loans In Canada

How Will Changes In The SBL Loan Program Affect Canadian Business Financing


OVERVIEW – Information on sbl loans and the government small business financing loan in Canada . Will changes in pricing and approvals affect borrowing ability and success ?

Heard the news?

Those drums are rumbling in the distance. The small business financing loan, aka ' SBL LOANS ‘may be getting a bit more expensive. We're pretty old ourselves and we actually can't remember when there has been a change in pricing to the ' SBL ‘- Canada's revered government guaranteed loan.

So is the program working ? Naturally the press and all the financial pundits (We suppose that includes us!) are weighing in on bank profits on this program, higher costs to the borrower, and the overall merits of the program.

Current interest rates under the program are 3% over prime and the scuttlebutt seems to be that the loan pricing might increase by 3/4 of 1%. It's probably just us because we ourselves don’t borrow a lot, but with rates an all time historic lows in Canada we're not quite sure everyone should be gnashing those teeth.

The program rate increase under this loan will supposedly over a multi-year period cost borrowers hundreds of millions more. That math should be quite acceptable though, given the program puts out Billions of dollars every year in loans to the SME sector in Canada.

When we talk to our clients about the program we focus on common sense, so let’s look at a real world example. The current borrowing cap under the program is $350,000.00. The most typical amortization or ‘loan term’ that we seek and recommend for our own clients tends to be 5 years.

So SBL loans on a 5 year term, for 350k of financing would currently cost you: $ 6766/m0
Using the new proposed pricing the loan payment would be: $ 6889/mo
We’ll let you mull over difference ! So whets our point here - lets not beat around the bush. It's simply that if the SME sector in Canada can achieve financing at 3 3/4% over prime for equipment and leasehold financing they might not be able to achieve otherwise is that really a bad thing.


Consider that the programs other features include:


A low personal guarantee

Repayable without penalty

Terms from 2-7 years

The ability to actually finance real estate under the program

A 10% only down payment /permanent equity requirement

Do we need to go on? We think you get the point, which is that at any interest rate SBL financing is a great deal when all terms and conditions are considered.

We hear often that the banks don’t make a lot of money on the program and that there is what one writer recently termed ' an administrative burden '.
So where does the business owner /manager fit in. They simply want access to financing that they might not otherwise be able to achieve. That's still a tough haul if you're a service business because the program only finances assets and leaseholds and real estate.

The bottom line? We think the Small Business Financing Loan, on balance, is still a great deal for those firms who have less than 5 Million dollars in annual or budgeted revenue, which is a qualifier under the program. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with SBL loans to start or grow your business.

P.S. The program is perfectly suited for the franchise industry also.

7 PARK AVENUE FINANCIAL
CANADIAN SBL LOANS FINANCING EXPERTISE



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/small-business-financing-loan-sbl-loans.html






7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com















Stan Prokop

Should A Corporate Line Of Credit Be So Hatke?

Business Credit Line Solutions


OVERVIEW – Information on a corporate line of credit in Canada . Business banking has its challenges and here are some ideas on overcoming them and achieving financing success .





A corporate line of credit in Canada. And what in fact does ‘ HATKE ‘ mean . It’s actually a Hindu term for ‘ different ‘ , so why do firms, including your competitors by the way! seem to get commercial banking facilities in place in a timely fashion, and with amounts and terms and conditions and covenants that suits their needs. At the same time your firm struggles to achieve the senior financing you need to grow... or survive.

We think its all about strategy smarts and attitude, we'll share with you how we do it and we'll let you decide. Let's dig in!

There are different circumstances surrounding your need for a corporate credit facility - i.e. a revolving line of business credit. In some cases you have a longstanding relationship with the bank already - it’s just that you need more funding. In some cases you're up for renewal.

In a perfect world you want to achieve agreement with the bank that you're in a position to meet covenants, grow your business reasonably, and that you have the ability to produce regular financial statements and reports that back up your facility. In the case of the majority of bank lines today in Canada for private firms in the SME /middle market sector owners also have to be prepared to address the personal guarantee issue. They never like doing that! Who does?

Another solid way to address why a corporate line of credit can’t be achieved is to put yourself in the shoes of the other party, i.e. the bank. Ask yourself or your financial management team why in fact the bank would decline a facility, not renew it, or decide not to increase it. In other words, to use a term the financial folks use - why aren't you ' bankable '?

One basic reasons, aside from some of the required fundamentals, is that reality that your business is not easily ' understood ‘. So if you don’t demonstrate how your business works (typically its called the 'operating cycle’) and why you need cash flow and when you need it you are in fact somewhat doomed

to failure in your search for financing. Technology type businesses might be a great example of a challenge in financing - at the opposite end of the spectrum if you are manufacturing nails then the business model is somewhat clear!

A strong executive summary or business plan is critical. We favor concise overviews that identify succinctly what industry you are in, a financial recap of recent sales and profits, an overview of the supplier and client base, and a positive spin on the factors that affect your industry

What does the banker do with that information? The put it into the context of the fundamentals we have spoken about. The majority of credit approval decisions in banks today, in fact all decisions when it comes to corporate credit are made by a man or women that you'll never meet. That is the underwriter -

They are in the bowels of the bank and are trained to assess risk and evaluate financials. They in fact will focus on cash flow, collateral, historical and projected profits, and ratios and covenants. Could anything be more exciting than those? We're financial types ourselves, so we actually do get excited about those, but we digress...

So our key point today. It’s all about understanding the process and doing it right. Be in a position to create a finance proposal that will get your company the corporate line of credit that you in fact need. Need some help? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN CORPORATE LINE OF CREDIT EXPERTISE



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


















Stan Prokop

Canadian Business Financing

We think we are being followed !

As our Business Financing Canada Blog hits 3000 page views per month and approaches 50,000 we want to thank the people
from Canada and all around the world who take the time to read it and call re: their financing needs.

Here's the data from that GOOGLE guy :



CLICK ON THE PIC

Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

An Asset Based Lending Loan Via An ABL Lender ? Things You’re Not Being Told!

A Conspiracy Theory In Business Credit Lines? !

OVERVIEW – Information on accessing the right debt capital and asset based financing choices in Canada via an ABL lender. The Asset based lending loan is a solid alternative to a bank credit line




An Asset Based Lending Loan. When it comes to a business line of credit via an ABL lender we sometimes think that there is a bit of a conspiracy theory when it comes to information the Canadian business owner or manager has when it comes to Canadian business financing.

Why is that ?Well we certainly didn’t read it in the National Enquirer, so we I suppose its just a notional feeling in talking to clients that they have been misinformed when it comes to alternatives in a commercial business credit facility . Let's explain.

In the U.S., and certainly less in Canada! asset based credit lines are an absolute cornerstone in commercial borrowing. They in effect replace Canadian chartered bank lines of credit and are essentially ' non bank' in nature. There's an interesting sidebar to our information we're sharing in that the banks are actually in the ABL business also, but it's a bit of stealth marketing we feel given that none of our clients certainly seem to know that! But we digress..!

These commercial credit facilities are conceptually the same as the bank credit lines, except that they often collateralize more assets, and, here's the kicker, they provide more working capital, cash flow and liquidity pretty well 99.999% of the time. In fact we personally with clients have never NOT seen the ABL loan provide the same or less business cash flow, it's always been more! Intrigued?

The cornerstone of the ABL credit is the flexibility it provides, as you are simply, under one umbrella, monetizing all your business assets. We were thinking about this the other day and perhaps another way to explain it is that this type of commercial borrowing is similar to the home equity credit line, where under one security agreement you can draw your funds for any purpose.

The assets that are monetized under an Asset Based credit are:

Receivables
Inventory
Equipment
Real Estate - if applicable

The equipment must of course be unencumbered, and the real estate, if it’s applicable in your firm’s situation uses the equity that's left in your real estate, i.e. the un-mortgaged amount.

Some readers might think that all of this might sound a little complex, but the reality is that the ABL line operates 100% in the same manner as a bank line of credit, i.e. the same security agreements, and the same daily method of usage as you draw down on the facility as you sell and collect for your products and services. That differences again - more liquidity, as A/R is typically margined at 90%, inventory in the 25-75% range, plus the added bonus of throwing your fixed assets into the borrowing mix.

We've talked a lot about similarities in the facility. but are there some differences? Two major differences are pricing and reporting. Briefly speaking pricing can vary. While it can be the same or less expensive thank bank financing in most cases it’s more expensive, but the benefit is the additional cash flow it brings into your company. And secondly there is more monthly reporting on the assets that fall under the credit facility. In our experience that additional reporting often makes your company a much sharper run machine as you understand your business a lot better. Trust us!

So, back to that conspiracy theory! We're still not sure we can prove it, so can we just leave it that it’s up to you to investigate an asset based lending loan via an ABL lender. Discover the difference in commercial borrowing in a manner you just may have never been told about. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED LENDING EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/abl-lender-asset-based-lending-loan.html




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com


















Stan Prokop

Cash Flow Finance Challenges? Will Your Company ‘ Break’ Tomorrow?

Working Capital And Cash Lifelines In Canada

OVERVIEW – Information on cash flow finance solutions and alternatives in Canadian business .




Cash flow finance in Canada continues to be recognized as the lifeline for your business. We're always preaching that, so to get a little bit of vindication once in awhile is a good thing. On Jan 26/2013 one of Canada's two national daily business journals again touted in it's headline ' CASH FLOW - THE LIFELINE TO BUSINESS SUCCESS '.

So how does the business owner address and solve the issues created by the need for working capital survival and growth. In the article in question it was pointed out that having proper cash management in effect ' stabilizes' your company. It was also pointed out that most of the important decisions your company makes ultimately involve cash considerations of some type.

Let's explore some techniques, and, as importantly, some solutions that come with the challenge of cash flow finance. At the start you have to have some sort of meaningful info. A lot of the business owners and financial managers we meet, certainly in the SME sector, have the data; they just don’t know what to do with it!

In effect you need to constantly be looking for ' clues ‘

in your company financial info that will allow you to resolve, with practical solutions, the challenges you face in financial management.

How solvent is your firm? It’s not the worse question for the owner/manager to ask herself or himself. In the past it was bankers that would always be addressing this issue, today there are numerous other finance providers that are in a position to ask the same question. They are in fact looking for ' link' in you data and, dare we say it, the probability of business failure.

A lot of financial types focus on one calculation called the ' current ratio '. There probably isn’t a more misleading piece of data, in our opinion, given that it does not reflect asset turnover, it just affects asset size. Simply speaking, if you have a lot of a/r and a lot of inventory your current ratio is high - but if you're not collecting properly, or inventory is obsolete or slow turning.... well we think you get the point.

Other ' relationships ‘(some call them ratio ... we don’t) are a lot more effective in understanding your cash flow problems, and needs. They include a gross cash flow calculation, which is simply your income plus depreciation. We actually encourage clients to look at the rate of inventory and receivable turnovers which can be calculated with just a couple ' data points ' from your financials.

So that brings us to some of those working capital and cash solutions available to your firm today. What are they?

They might include, but are not limited to:

Receivable financing

Inventory finance

Non bank asset based lines of credit

P O / Supply Chain /Contract financing

Monetization of tax credits

Sale leasebacks

To understand how you can better asset cash flow finance issues see out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in both techniques of analysis, and , more importantly, implementing those solutions.

7 PARK AVENUE FINANCIAL
CANADIAN CASH FLOW FINANCE EXPERTISE




Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/cash-flow-finance.html




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com














Stan Prokop

Corporate Asset Finance . Feeling Overwhelmed . How A Lease Company Addresses Your Issues

Ever thought about cradle to grave in terms of Asset financing In Canada ?



OVERVIEW – Information on corporate asset finance in Canada . Can A Lease Company Solve Your Business Financing Problems ?




Corporate Asset Finance has the ability to be very complex today - the positive news being there are a number of options for the Canadian business owner / financial manager to choose from. That might be a lease company, a bridge loan provider, or even a Canadian chartered bank. The owner/manager can then be forgiven for not truly grasping the benefits, and risks, of asset finance. Worse, more often than not available advantages and benefits are underutilized.

One way to take control of the asset finance concept is to utilize the services of a financing expert. Truth be told it is a rare breed of business owner or manager that has the background in credit, law, finance, tax , and accounting that are all part of the asset finance equation.


One way in which the asset finance question is often overlooked is simply the inability of the owner and manager to look at asset financing from a ‘cradle to grave ‘point of view


So what are those starting to end points when it comes to corporate asset finance via your lease company or other alternative financial institution? First of all the borrower has to have a strong sense of the general marketplace – that is probably one of the greatest areas of misinformation or confusion. We talk to countless clients who simply don’t understand the lay of the land when it comes to asset financing – namely who are the players in the asset arena they are playing in? We can’t count the number or times we’ve seen a client who has previously spent a lot of time dealing with the wrong players and the wrong offerings. To put it simply, they don’t understand the lay of the land!

After getting a strong handle on the overall market your firm has to have some sort of evaluation criteria. Those criteria involve rate, term, structure, useful economic life, etc. Documentation, tax and accounting issues, as boring or mundane as they might sometimes seem are critical to ‘best practices ‘in asset finance.

In entering a lease or asset finance transaction your company needs to know how this particular finance transaction can make or lose your company money. That might come from understanding applicable rate structures, or perhaps knowing your firm might have the bargaining power to issue a tender to solicit asset finance bids. The big boys and government does it - can you? Sometimes you can . Not always, but sometimes!


Key issues in accounting and finance play a key role in asset finance.
They might include depreciation policies, or simply your choice to enter into an operating off balance sheet type transaction.
Part of the business of asset finance is of course knowing the long term economic value of the assets you’re financing. Your overall financing strategy brightens significantly when you’re keenly aware of asset resale values and obsolescence issues.

Want to get a solid handle on the pros and cons of corporate asset finance in Canada, dealing with a lease company or commercial finance firm. If you don’t know it all (who does? ) seek out and speak to a trusted, credible and experienced Canadian business asset financing advisor who can assist you in getting un-overwhelmed!

7 PARK AVENUE FINANCIAL
CORPORATE ASSET FINANCE EXPERTISE




Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/corporate-asset-finance-lease-company.html












Stan Prokop

How Good Receivable Factoring Companies Work In Canada

How Much Money Can Nuances Save You ?

In Factoring.. Thousands !!




OVERVIEW – Information on receivable factoring companies in Canada . How can the business owner benefit from an A/R finance strategy that maximizes the obvious and not so obvious benefits of this powerful cash flow tool.




Receivable factoring companies in Canada. Can a good one save you money on A/R financing costs, while delivering the benefits of Canada's newest cash flow financing tool ? We think so .. and here's why.

As most business owners and managers know. its not always about the obvious in business. Sometimes those ' subtle nuances ' are quite important! So while the obvious benefit of AR Finance is simply receiving the majority of your cash for sales you generated that day this overall financing strategy has other benefits also. And while key benefits might be the same, the type of firm you deal with and how they price their financing is key. That's where the ' saving money ' concept comes in where we're doing apples to apples comparison.

One way that many firms in fact do not assess a receivable finance offering is the concept of being able to alter their payment terms strategy. If the business owner/manager was previously unable to compete with others offering your clients better payment terms you have now leveled the playing field. As long as your gross margins can absorb the cost of that 30 days of extra financing , or 60???.. you're in a position to potentially gain more business with the use of receivable factoring companies.

So back to those nuances. What do you really need to focus on after you have decided to adopt an A/R financing strategy? First of all you need to understand how the receivable finance firm makes it money, as all businesses are of course focused on making reasonable profits relative to their risk.

In factoring your pricing is going to come from an analysis of your total sales volume, how much you’re going to finance on an ongoing basis, the average size of your invoices, number of clients, and the overall general credit worthiness of your firm and your clients. With A/R finance your firm doesnt have to have the same level of bank quality financial statements that you would in fact require to be able to borrow these sums from the bank.

So lets get back to some of those nuances, which, when understood make your firm a winner in the cash flow and working capital game. It's feels like a game sometimes, doesnt it? as do other aspects of business.

A solid receivable factor company won’t insist you finance all your sales, especially if you don't need that extra cash. Remember also that a good partner finance firm will be charging you on a per diem basis, with no tricks in between that. What does that mean? Simply that if your client pays in 42 days as an example that you are in fact only charged for 42 days, not the nearest increment of 45 or 60 days!

We encourage clients, either on their own, or with a credible financing advisor to understand the true benefits of asset turnover. Prior to cash flow financing using factoring your firm was unable to significantly grow sales and borrow all the working capital you need to achieve that goal.

So when you use factoring to eliminate the cash flow gap you will find that your income statement and revenues and profits are nicely positioned to enhance your business significantly. Profits don't equal cash flow as most business owners painfully find out - and that’s where A/R finance solves the mystery of growing your business with all the capital you need.

One final tip. And as far as nuances go, it’s a big one. Consider a confidential invoice factoring strategy. You will achieve all the benefits of the ' main street' ' ' traditional' factoring offered by most companies while at the same time maintaining full control of all your billing, collecting and client relationships.

Want to understand some of those ' nuances' in a better fashion. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a working capital solution and strategy that makes sense.

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE FACTORING EXPERTISE




Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/receivable-factoring-companies-canada.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com


















Stan Prokop